Centre freezes import of completely built A/C units
New Delhi, October 16
To promote domestic manufacture, the Centre has banned the import of completely built units air-conditioners with refrigerants.
Air-conditioner imports have been on the radar of the government for some time and has been identified as among the priority sectors where imports can be reduced, in line with the government’s Self-Reliant India initiative.
The Centre’s move is expected to give a boost to capacities dedicated to third-party manufacturing in the country.
However, experts pointed out that most companies that make ACs in India rely heavily on imports for critical components such as compressors from China.
The AC segment has a large number of players and several brands rely on imports not only from China but also from Thailand, Vietnam and Malaysia with which India has free trade pacts.
According to a DGFT notification, imports of all types of split and window airconditioners with “refrigerants” have now been moved to the ‘prohibited’, from the ‘free’, category.
According to industry estimates, completelybuilt imported units account for about 30 per cent of the air-conditioners segment. The total number of air-conditioners sold in India annually is over 65 lakh units.
Pradeep Bakshi, Managing Director & CEO, Voltas Ltd, said, “This is a step in the right direction and will give a boost to domestic manufacturing of airconditioners. The Government had been in discussion with the industry on this issue for some time now. Several brands have been importing ACs through the FTA route. So, this will pave the way for ramping up the manufacturing capacity of air-conditioners in India. At the same time, we must also focus on strengthening the component ecosystem of ACs in the country.”
Over the past few years, leading international and Indian companies have been heavily investing in creating manufacturing capacities in the country. Vijay Babu, Vice-President (Home Appliances, LG Electronics India, said that the “entire line up” of the company’s ACs are made in India and the company “will continue to invest in manufacturing facilities”.
Level playing field
Kanwaljeet Jawa, CEO and Managing Director of Daikin India, said, “This will enable a level playing field for players that have invested in setting up manufacturing facilities in the country. We are already exporting ACs to several markets. With the penetration of ACs in single digits, this segment has a huge growth potential.”
Manish Sharma, President and CEO, Panasonic India and South Asia, also said the company has been catering to domestic demand and exporting ACs from its factory
The government’s move is expected to give a boost to capacities dedicated to third-party AC manufacturing.
“We currently export air-conditioners from India to SAARC, West Asia and Africa. Recently, we also announced our intention to share Panasonic’s manufacturing technology and help select companies manufacture refrigerators and ACs reducing dependency on imports and driving the ‘Make in India’ agenda,” he added.